Taking out a small business loan can be a huge help for any business owner. Whether you want to grow your business, purchase updated equipment, or consolidate past business debts, a loan can take a lot of pressure off and allow you to reach your financial goals, quicker.
However, just because you apply for a loan, does not automatically mean your application will be accepted. There is a process that you must follow, and documentation you must provide in order to qualify for funding. Of course, there is no need to be intimidated or worried that you won’t get the funding you need to grow your business, if you are prepared. Aside from having the correct documentation and information at the ready, there are certain circumstances you’ll want to wait for, to give yourself a better chance of being accepted.
Firstly, when applying for a loan, the lender will look at the status of your business. This means that he will want to know if you are earning enough money to where you will have the means to pay the loan back according to its terms. Unless your business has a steady rate of cash flow all year round (which is, admittedly, very rare) you will want to apply for your loan during your high season. So, if that means that most of your demand is during the summer months, you will want to apply at the peak of your strong season. This will look good to the lender, and he or she will feel more at ease with lending you some of their money, knowing that you have the cash to pay it back eventually.
Second, you’ll want to take a look at your credit score. Even if you’ve just broken into your high season, and you are making money, if your credit score does not reflect a good, steady cash flow, you will most likely be turned away (or at least be giving a higher interest rate to pay). Be sure that your credit score looks good enough to show the lender that you do pay back your debts, to the best of your ability. This is one of the first things that lenders check when deciding if they will accept your loan proposal, so be sure that you have everything in order beforehand.
Although it might seem scary to apply for a small business loan (especially if it’s your first time), it is very doable if you know what to do. By applying for the loan when your business is in its strongest and your credit score is healthy, you will most likely be accepted and in a matter of days, you will receive the funding you need to achieve your financial and business goals.
Ready to take the first step to reaching your financial goals? Click here for a FREE quote from Onebox Funding, and find the best loan with the lowest rates, today!